Housing Wealth Fluctuations Affect Seniors' Health Care Choices
Home equity run-ups due to house price increases raise use of paid home health care and unpaid informal care, but don't affect utilization of nursing home care.
The daunting costs of long-term health care pose a challenge for senior citizens. Half of adults who live to the age of 65 will require long-term care services at some point. For those who need such care, the average annual cost of these services rings in at $133,700 in 2015 dollars. For a small subset of the population, 5 percent of men and 12 percent of women, the total lifetime cost of long-term care will exceed $250,000. Medicaid covers about 35 percent of these costs; elderly individuals and their fami-lies bear about half the cost of long-term care.
Explaining the U-Shaped Pattern of Farm Size and Productivity
In Access to Long-Term Care After a Wealth Shock (NBER Working Paper No. 23781),
Joan Costa Font,
Richard Frank, and
Katherine Swartz look at how changes in wealth, specifically housing wealth, affect decision-making around the use of three types of long-term care services: paid home health care services, unpaid informal care, and nursing home care. Housing wealth is a particularly relevant metric for this question because it constitutes the largest source of savings for most Americans, particularly older Americans. Housing assets represent 67 percent of the median per capita net worth of adults over the age of 66, and home equity is the primary self-funding mechanism for those who require long-term care.
— Dwyer Gunn
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